Shadow banking
Book notes: Central bank capitalism: monetary policy in times of crisis, by Joscha Wullweber
This book asks if independent monetary policy is feasible at a time when central banks prop up the poorly regulated shadow banking sector
Chinese authorities: NPL levels are little changed
PBoC governor Yi Gang vows to resolve property sector risks as another developer defaults
Liquidity dependence may hamper QE exit
Expanding reserves may prove perilous for financial stability, with maximum danger during QT, writes Viral Acharya
Book notes: The Fed unbound, by Lev Menand
Instead of the Fed expanding its tasks to meet shadow banking needs, this book calls for charter-like oversight of NBFIs
The PBoC, real estate debt and financial stability in China
Central bank policy-makers are restricted in terms of capacity and space by their efforts to manage the nation’s property bubble amid declining growth
Shadow banks need macro-pru regimes – Bundesbank paper
Limits on shadow banks’ leverage could have helped avert global financial crisis, researcher finds
The international effort to manage NBFI risks: where do we stand?
The Covid-19 shock demonstrated more needs to be done to address stability risks posed by the NBFI sector. Maurizio Trapanese details progress made during the Italian G20 presidency as well as outstanding macro-prudential issues
Interoperability of stablecoins
Central bank reserves could be a better option for backing stablecoins than Treasuries, say Manmohan Singh, Caitlin Long and Charles Kahn
Book notes: Fintech regulation in China, by Robin Hui Huang
The book includes meticulous exploration of detailed regulations across the Chinese fintech sector, but risks missing some of the bigger picture due to China’s on/off oversight
ECB takes over supervision of largest EU investment firms
Firms posing systemic risk should not try to circumvent new regime by changing structure, ECB says
Shadow banking changes macro-prudential trade-offs – BdF paper
Presence of non-banks increases importance of dynamic capital ratios, researcher argues
Benoît Cœuré on CBDCs, stablecoins and central bank fintech co-operation
BIS Innovation Hub chief voices concerns about the timing of stablecoin and CBDC roll-outs, fintech risks for supervisors and monetary policy, and details development plans for eight innovation locations
Shadow banks play key role in business cycle – BoE paper
Contraction in securitisation can spill into wider credit conditions, researchers say
Former RBI official Rabi Mishra on macro-pru in the post-Covid world
The former executive director discusses challenges for supervision, global governance reform and the rise of fintech
Is there a path between the Covid abyss and chasm of financial risk?
Macro-prudential policies are being used to prevent economies from falling into the Covid abyss while also ensuring that a correction in ever-higher asset prices do not crush the economy. Are both objectives achievable?
Investment fund sector needs stress tests – Bundesbank paper
Researchers say their model finds investment firms can magnify losses from global asset price shock
RBI supplies liquidity to Indian shadow banks ‘to avoid systemic risk’
Non-banking financial sector has faced major difficulties over last two years
Shadow banking increases need for asset purchases – ECB paper
Large non-bank financial sectors can impair transmission of monetary policy, paper finds
Tighter regulation may be working – MIT economist
Kristin Forbes says banks may be more resilient but warns risk could be shifting to shadow sector
Hidden money creation is impacting policy, PBoC economist warns
“Banks’ shadow” hampers monetary and financial stability policy, Guofeng Sun says
Big tech: a threat to banks?
The explosive growth of financial services offered by big tech companies in China offers important lessons